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How To Turn Your Roth IRA Into A Secret Emergency Fund The IRS Can’t Touch
['Aj Tiarsmith']
24/7 Wall St.
Roth IRA contributions can be withdrawn at any age, for any reason, tax- and penalty-free, making the account a dual-purpose retirement and emergency fund.
Confuse the two buckets and the “secret emergency fund” becomes an expensive mistake.
If you hold your Roth contributions in a stable, liquid vehicle, say a money market fund or short-duration Treasury fund inside the IRA, and the emergency-fund logic holds cleanly.
If you want it to double as emergency cash, hold a money market or short-Treasury fund inside the IRA for that portion.
Used correctly, your Roth IRA can serve as retirement account and emergency reserve at once.